The almost-lost cause of freedom

In Brazil, economic liberals (in the British, free-market sense, not the socialistic American one) are as scarce as snowflakes. Government revenue as a share of gross domestic product (GDP) has risen steadily in the past decade, and is now closer to the level in rich European countries than that of Brazil's middle-income peers. Despite this, none of the likely candidates in the presidential election due in October talks about cutting taxes. The two leading candidates are both on the tax-and-spend centre-left, says The Economist.
Brazil's shortage of economic liberals is even stranger given the country's history, says The Economist:
  • In Chile economic liberalism was tainted by association with military rule.
  • But Brazil's 1964-85 military dictatorship chose an economic model built around state planning and restricted imports.
  • It is necessary to go back to the 19th century, when Brazil's then monarchy was briefly in thrall to Scottish economists, to find something like classical liberalism there.
    One reason why liberals have been so muted since Brazil became a democracy again is that voting in elections is compulsory:
  • This means that a large number of poor voters, who pay little tax but benefit from government welfare spending, help to push the parties in the direction of a bigger state.
  • If the same system were to be applied to America, the Democrats might well enjoy a permanent majority.
    Also, many of today's leading Brazilian politicians played a part in the opposition to military rule:
  • This world of intellectual and sometimes violent resistance was dominated by various shades of left-wing thought, seasoned with anti-Americanism (the United States welcomed the 1964 coup that brought the generals in).
  • During the dictatorship, today's president, Luiz Inácio Lula da Silva, was a trade-union boss; his predecessor, Fernando Henrique Cardoso, was a Marxist academic.
  • The front-runner in the presidential polls, José Serra (from Cardoso's Social Democrats), was an exiled former student leader.
  • His main rival, Dilma Rousseff (from Lula's Workers' Party), was a Trotskyist.
    Source: Observers, "The almost-lost cause of freedom," The Economist, January 28, 2010.

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    First published by the National Center for Policy Analysis

    FMF Policy Bulletin / 16 February 2010
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